Directors’ Duties in Venezuela

>> Powers and Duties in Venezuela

You must act within the powers imposed by the Venezuelan Commercial Code of 1955 and the Articles of Incorporation and By-laws.

Duties – Skill and Care

In exercising directors’ powers, you are required to exhibit the degree of care and diligence that a reasonable person would exercise in the same circumstances.

Duties – General

As a director, you must act in a way which you think is most likely to promote the success of the company, which in most cases should mean carrying out the will and acting in the interests of the entity’s shareholder(s), having regard to the company’s employees, trading partners, responsibilities to the state and other applicable factors. You need to consider a number of statutory factors relating to corporate requirements, including the long term consequences of your decisions, the company reputation and the interests of other stakeholders such as employees and the community.

In addition, you have the following specific duties foreseen in the Commercial Code:

  • to have the correct number of shares as indicated in the company’s By-laws, deposited in the company vaults as a guarantee against your possible liabilities
  • to ensure that the accounting books required by law (diaries, ledgers and inventory books) and corporate books (shareholders’ meetings, directors’ meetings, shareholders’ register), are properly and legally maintained, and are  up-to-date
  • to ensure that shareholders have access to the shareholders’ register and that the statutory auditor has access to all the relevant books
  • to have a summary balance sheet made every six months and provided it to the statutory auditor
  • to oversee that the company accounts are prepared according to the law and general rules of accounting, and to vouch for the accuracy of the amounts expressed therein and in any supporting documents
  • to have an inventory of the company assets and a general balance made at the end of each fiscal year
  • to abstain from using the votes associated with their shares (when also a shareholder) or voting in matters pertaining to the approval of balances or approval of the directors’ responsibility towards the company
  • to give the general shareholders’ meeting an account of the administration of the previous year
  • to convene the annual general shareholders’ meeting each year and other shareholders’ meetings whenever necessary, or when 20% or more of the shareholders so request it;
  • to convene a shareholders’ meeting whenever the capital is eroded by one-third, to decide whether the shareholders will repay the lost capital, to reduce the capital to the existing sum or to dissolve the company

Duties – Other

  • there are many other areas of law that impose duties on directors and senior managers. Matters likely to be of particular relevance, depending upon the nature of the entity and its activities, are set out below
  • to stop all company business and proceed to liquidation if the capital diminishes by twothirds of its statutory amount, convening a shareholders’ meeting to decide on whether to continue the liquidation or repay the lost capital or reduce the capital to the existing sum
  • to abstain from falsely asserting that subscription money has been received or outside persons are a part of the company, or announcing false earnings or subscriptions to obtain shares or place company obligations or change their value in the market
  • to ensure that there are no avoidable hazards in the workplace for employees by overseeing and implementing the rules deriving from the pertinent law and regulations
  • to ensure that no environmental degradation results from the company’s actions by complying with the pertinent law and its regulations
  • to ensure that all applicable taxes are declared (e.g., income tax, value added tax, municipal taxes)

Like all employees, you must comply with AntiBribery and Corruption (ABC) legislation, including the UK Bribery Act and the US Foreign Corrupt Practices Act, and must understand, follow and promote the ABC policies.

Latest version updated 10th April 2018

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Venezuelan bolívar


$ 371